PG&E Pleads Not Guilty to Charges From San Bruno Pipeline Explosion
California Utility Charged With Knowingly Breaking Federal Safety Rules
From the Wall Street Journal: April 21, 2014
PG&E Corp pleaded not guilty Monday to criminal charges that the company knowingly broke federal safety rules before a fatal natural gas pipeline explosion in San Bruno, Calif., in 2010.
"While we don't believe any employee intentionally violated federal pipeline safety regulations, San Bruno was a tragic accident and we're accountable for that," PG&E said in a statement following the arraignment in federal court in San Francisco.
Earlier this month, a federal grand jury issued a 12-count indictment accusing PG&E of "knowingly and willfully" failing to keep important pipeline records and not paying proper attention to parts of its aging natural gas pipelines, including the section that exploded.
If found guilty of all 12 felonies, PG&E could face nearly $3.5 million in statutory penalties. The court also could impose an alternative fine based on any financial gain the company received as a result of the violation or on victims' losses, according to the U.S. Justice Department, which is prosecuting the case with the California Attorney General's office.
The indictment alleges Pacific Gas & Electric Co. of knowingly violating the federal Pipeline Safety Act, which dates back to 1968, between 2003 and 2010. In the only previous criminal case brought under the act, Olympic Pipeline Co. and three of its employees pleaded guilty in 2002 to violating pipeline safety rules before a petroleum pipeline exploded in 1999, killing three people in Bellingham, Wash.
PG&E's high-pressure gas pipeline in San Bruno exploded on Sept. 9, 2010,
igniting a fire that damaged or destroyed more than 100 homes and killed eight.
Federal investigators found that the utility used a method for testing the strength of the gas line that they consider outdated and dangerous. The test, which boosted the pressure of the gas flowing through the pipe above the allowed maximum level about every five years, probably weakened the pipeline, which had faulty welds and other flaws, investigators said.
The utility should have used water to test its pipes, according to the National Transportation Safety Board's August 2011 report on the disaster. PG&E has been using water to test its old pipelines since the explosion, using a method called hydrostatic testing.
San Bruno City Manager Connie Jackson, who attended the court hearing, said people in her city believe PG&E is guilty of the charges.
"
San Bruno was not an accident," she said, "it was a result of decades of mismanagement and failure to maintain the system."
PG&E faces potential state fines and penalties that could total about $2 billion. Lawyers for the state have accused the utility of breaking federal and state safety rules for decades in a pending case at the California Public Utilities Commission.
Write to Cassandra Sweet at cassandra.sweet@wsj.com
MJCronin
Sr. Process Engineer